Premiums & Policy Charges
Premiums and Policy Charges, Explained
How each premium dollar works for you inside a permanent policy.
5 min read
Start with a question
When you pay a premium, where does that money go?
In plain language
Your premium keeps your protection active. In permanent policies such as universal life and IUL, part of each premium pays for the cost of insurance and policy fees, and the rest builds your cash value.
The cost of insurance is based on your age, health and coverage amount — which is why starting early gets you the best value. Your licensed professional walks you through every line so you know exactly how your money works.
- Premium chargeA small percentage of each payment
- Cost of insuranceYour family’s death benefit protection
- Administrative & rider chargesPolicy fees and optional benefits
- Your cash valueEarns interest and grows over time
A practical example
Example
Lena reviews her policy summary with her licensed professional and sees how each part of her premium protects her family today and builds cash value for tomorrow.
Keys to get the most from it
- Start early to lock in a lower cost of insurance.
- Keep your policy for the long term to get its full value.
- Pay your planned premium consistently to grow your cash value.
Common questions
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